Skip to content

America’s DEMOGRAPHICS and DYNAMISM – The Weekly Standard

September 3, 2011

America’s Demographics and Dynamism

Amidst the gloom and doom, there are reasons to believe America will remain the preeminent global economic power.

SEP 3, 2011 • BY IRWIN M. STELZER

There is gloom and then there is doom. We Americans have plenty of reason for the former as we say goodbye to summer on this holiday weekend on which I am told the last gin and tonic of the season is consumed by those so inclined. Confidence in the economy is plunging at the fastest rate since the collapse of Lehman Brothers; the national debt is rising as spending in this period of supposed austerity easily tops last year’s; a recent blip notwithstanding, house prices are somewhere between stagnant and falling; foreclosures are up and home sales are down despite historically low interest rates; share prices fluctuate wildly; a vast majority feels America is on the wrong track; and economists are scrambling to lower their growth forecasts, and not by a little bit.

The final shard in the broken dream of a prosperous America is the jobs market: for the first time since February 1945 the economy did not create a single net new job in August. Preliminary job creation figures for the past two months were revised down by 58,000. Average hourly earnings fell, the unemployment rate is stuck at 9.1%, and 25 million Americans, 16.2% of the work force, are looking for full time work. Gloom enough to satisfy the most pessimistic of us.

But doom is quite another matter from gloom. That’s what Federal Reserve Board chairman Ben Bernanke was hinting at when he told his central bank colleagues from around the world, “The growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years. It may take some time, but we can reasonably expect to see a return to growth rates and employment levels consistent with those underlying fundamentals.” Translation: if we get our policies right, there is no reason America can’t recapture the optimism and energy that we once called “the American dream”.

Or, as Sharmin Mossavar-Rahmani, a highly respected analyst and head of investment strategy in Goldman Sachs’ private wealth management group puts it, “The current crisis has not dealt a fatal blow to the US as the preeminent economic and global power.”

The American economy still produces more goods and services than the next three largest economies (Japan, China and Germany) combined. And is likely to hold that position as successive Japanese governments wrestle with decades of stagnation, China attempts to cope with the problems created by its centralized economic management and currency manipulation, and Germany wallows in a eurozone financial crisis that seems to worsen by the day. America’s per capita GDP exceeds that of emerging rivals such as China and India, by more than ten and almost fifty times, countries that declinists say will soon overtake us economically and in other ways.

via America’s Demographics and Dynamism | The Weekly Standard.

Advertisements
One Comment
  1. September 3, 2011 11:11 AM

    The political system is broken. The two parties are more interested in destroying their opponents than working for the good of the nation. In this climate there is little hope for reducing our high unemployment. That unemployment rate is really much higher than the official BLS rate and everyone knows that fact.

    So while we may still be an economic success compared to the rest of the world there are many signs that we will not continue to hold that position. IRWIN M. STELZER’s opptimism is not supported my many facts.

Comments are closed.

%d bloggers like this: